Rental markets are one of the most profitable and attractive investment opportunities for those navigating the real estate industry. Texas continues to outperform most other US states in providing affordable properties that are also surrounded by booming economies, populations and real estate values. Having the tools to start investing in Texas and knowing where to invest can quickly make you a very successful rental property investor. If that dream is for you, here’s an invaluable guide covering what to look for in rental properties and four amazing rental markets in Texas to consider:

Key qualities to look for:

Landlord friendly laws:

Texas is one of the most landlord-friendly states in the US. The absence of income taxes, more lax real estate codes and laws, and more convenient access to the documents you’ll need to manage legal needs will all help you invest in the state. The outlandish amount of advantages you will have as an investor in Texas over other states is hard to overestimate. The accessible nature of capital and co-investment options in the state makes the deal even sweeter.

Stable population growth rate:

With rental properties, having a solid crop of leads is crucial. If you find a place with a stable population growth rate, your investment will be rock solid. Fortunately, Texas has nearly endless cities that have seen their populations grow steadily over the past decade. This quality becomes one of the main reasons why Texas has become the benchmark for rental property investment in the United States.

Trade markets and booming economy

Even if real estate prices are affordable, but are increasing year after year, your investment may be doomed if the location does not have a strong economy. Business markets and booming economies are the foundation that allows real estate to grow steadily, so avoid anything that even whispers “ghost town.” Low employment rates, booming economies, and high median wages are all important to consider.

Affordable Properties

More than any other quality, finding properties you can afford to invest in is essential. Fortunately, Texas is home to some of the best affordable properties that can lead to massive ROI in your future. The large amount of land under development and the rental properties being built on it throughout Texas make it a safe bet for those who are just starting to invest in rental properties.

Best Rental Markets:

1. Boerne, Kendall County

Median property price: $887,297

Price-to-rent ratio: 35.4%

Traditional rental income: $2,088.74

Kendall Country is home to many amazing towns where rental property investors can find profit. Boerne is particularly noteworthy and has even appeared on many ‘best places to live’ lists over the past few years. Its fast-growing economy, steady population growth, low employment rate, and suburban-style atmosphere make it particularly suitable for investors looking to provide rentals for working families.

2. Houston, Harris County

Median property price: $920,835

Price-to-rent ratio: 37.78%

Traditional rental income: $2,030.91

Houston is a huge city, and the sheer size of the metropolitan area makes many investors reluctant to tackle the location. Fortunately, if you want to invest in one of the major American cities, Houston is the most accessible. Retirees are particularly fond of the city, so rental investors looking to buy retirement-friendly properties should keep Houston in mind.

3. McKinney, Collin County

Median property price: $516,236

Price-to-rent ratio: 21.4%

Traditional rental income: $2,010.2

Money Magazine has featured McKinney as one of its best places to live over the past decade, and the mid-sized city (for Texas) continues to experience massive growth in both its population and economy. The low crime rate, incredible educational opportunities, and variety of jobs in the area make it a fantastic location for real estate investors looking to rent to young professionals and other middle-class people.

4. Tyler, Smith County

Median property price: $489,041

Price-to-rent ratio: 26.91%

Traditional rental income: $1,514.45

Tyler is one of the most charming towns in Texas, which is saying a lot considering the incredible size of the state. It has incredible scenery, a thriving cultural scene and an economy that makes it a hyper-safe investment for rental property investors. Considering the number of people flocking to Tyler from Austin and other popular cities, Tyler offers one of the most attractive rental real estate investment opportunities on this list.

Real estate can be your career

With these great tips on locations and investments, Texas could become an oil sink that will keep your bank account heavy for the rest of your life. With real estate and business showing no signs of stopping their crazy growth over the next decade, now is the perfect time to get your feet wet. Armed with the knowledge in this guide, you can start earning passive income from rental properties and start living the dream life with confidence.

This article does not necessarily reflect the views of the editors or management of EconoTimes


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